The Nature and Scope of Strategic Management
The Nature and Scope of Strategic Management
The strategic-management process does not end when the firm decides what strategy or strategies to pursue. There must be a translation of strategic thought into strategic action. This translation is much easier if managers and employees of the firm understand the business, feel a part of the company, and through involvement in strategy-formulation activities have become committed to helping the organization succeed. Without understanding and commitment, strategy-implementation efforts face major problems. Implementing strategy affects an organization from top to bottom; it impacts all the functional and divisional areas of a business.
It is beyond the purpose and scope of this text to examine all the business administration concepts and tools important in strategy implementation. Even the most technically perfect strategic plan will serve little purpose if it is not implemented. Many organizations tend to spend an inordinate amount of time, money, and effort on developing the strategic plan, treating the means and circumstances under which it will be implemented as afterthoughts! Change comes through implementation and evaluation, not through the plan. A technically imperfect plan that is implemented well will achieve more than the perfect plan that never gets off the paper on which it is typed.
The strategic management process means defining the organization’s strategy. It is also defined as the process by which managers make a choice of a set of strategies for the organization that will enable it to achieve better performance. Strategic management is a continuous process that appraises the business and industries in which the organization is involved; appraises its competitors; and fixes goals to meet all the present and future competitor’s and then reassesses each strategy. Strategic management process has following four steps:
1.| Environmental Scanning- Environmental scanning refers to a process of collecting, scrutinizing and providing information for strategic purposes. It helps in analyzing the internal and external factors influencing an organization. After executing the environmental analysis process, management should evaluate it on a continuous basis and strive to improve it.| | 2.| Strategy Formulation- Strategy formulation is the process of deciding best course of action for accomplishing organizational objectives and hence achieving organizational purpose. After conducting environment scanning, managers formulate corporate, business and functional strategies.|
| 3.| Strategy Implementation- Strategy implementation implies making the strategy work as intended or putting the organization’s chosen strategy into action. Strategy implementation includes designing the organization’s structure, distributing resources, developing decision making process, and managing human resources.| | 4.| Strategy Evaluation- Strategy evaluation is the final step of strategy management process. The key strategy evaluation activities are: appraising internal and external factors that are the root of present strategies, measuring performance, and taking remedial / corrective actions. Evaluation makes sure that the organizational strategy as well as it’s implementation meets the organizational objectives.| These components are steps that are carried, in chronological order, when creating a new strategic management plan. Present businesses that have already created a strategic management plan will revert to these steps as per the situation’s requirement, so as to make essential changes.
Components of Strategic Management Process
Strategic management is an ongoing process. Therefore, it must be realized that each component interacts with the other components and that this interaction often happens in chorus.
You Cannot Outsource Strategic Thinking. The Right Process with the Right People Around the Table Will Ensure Your Strategy is Objectively Owned and Implemented. Strategy equates to change for the organization. Strategy is making critical choices that determine the nature and direction of an organization. Thinking Dimensions approaches strategy formulation with the fundamental belief that the client knows far more about their business than an outside consulting firm ever will. We do not spend a client’s financial resources on primary or secondary research to tell them what they already know. The strategic way forward is owned by the client – not the consultants.
Our strategy formulation process taps into the internal knowledge and intellectual capital of the company with a series of facilitated work sessions. Step by step, we guide the Leadership team through a series of decisions that ultimately determine the nature and direction of the company. The resulting strategic profile guides decision making, the allocation of resources and identifies the specific goals that drive value creation. Our structured strategic process compels the CEOs and executives to make decisions that result in a clear strategic path. We advise Mid-size growth, Business Unit and Multinationals to determine:
1. What is our strategic intent and capacity for change? 2. What products to offer / not offer? 3. What markets to serve / not serve?…geographies to serve /not serve? 4. What capabilities to invest in / not invest in to drive a sustainable competitive advantage? 5. What single page tool can we use to guide strategic and operational decisions making? Following the strategic formulation phase the client benefits from the following outcomes: * Clarity as to the current and future nature and direction of the firm * Executive alignment on product & market growth priorities * Externally validated competencies for competitive advantage * Focus on where to invest effort, capital and time in implementation * A set profile or plan that is used to guide daily decision making and enable mid-course changes
Terms In Strategic Management
Strategic management, like many other subjects, has developed terminology to identify important concepts. Each of the following definitions is amplified and supplemented with additional examples in subsequent chapters. ————————————————-
The organization’s purpose outlines why the organization exists; it includes a description of its current and future business (Leslie W. Rue, and Loyd L. Byars) The purpose of an organization is its primary role in society, a broadly defined aim (such as manufacturing electronic equipment) that it may share with many other organizations of its type ————————————————-
The mission of an organization is the unique reason for its existence that sets it apart from all others (A. James, F. Stoner, and Charles Wankel) The organization’s mission describes why the organization exists and guides what it should be doing. Often, the organization’s mission is defined in a formal, written mission statement. Decisions onmission are the most important strategic decisions, because the mission is meant to guide the entire organization. Although the terms “purpose” and “mission” are often used interchangeably, to distinguish between them may help in understanding organizational goals. ————————————————-
A goal is a desired future state that the organization attempts to realize (Amitai Etzioni). ————————————————-
The term objective is often used interchangeably with goal but usually refers to specific targets for which measurable results can be obtained. Organizational objectives are the end points of an organization’s mission. Objectives refer to the specific kinds of results the organizations seek to achieve through its existence and operations(William F. Glueck, and Lawrence R. Jauch) Objective define what it is the organization hopes to accomplish, both over the long and short term. In this paper the terms “goals” and “objectives” are used interchangeably. Specifically, where other works are being referred to and those authors have used the term goal as opposed to objective, their terminology is retained. ————————————————-
Strategies are the means by which long-term objectives will be achieved. “A strategy is a unified, comprehensive, and integrated plan that relates the strategic advantages of the firm to the challenges of the environment. It is designed to ensure that the basic objectives of the enterprise are achieved through proper execution by the organization” (William F. Glueck, and Lawrence R. Jauch). The role of strategy is to identify the general approaches that the organization utilize to achieve its organizational objectives. Therefore, the choice of strategy is so central to the study and understanding of strategic management. ————————————————-
In contrast, tactics are specifics actions the organization might undertake in carrying its strategy. ————————————————-
In years past it was common practice to title courses and books in the strategic management areas as “Business policy,” if one wished to take up broader range of organizations. In one sense, what has happened is that word strategy has replaced policy. But there is another sense in which the term policy is used that differentiates it from strategy, and from tactics as well. In this view, policies are the means by which objectives will be achieved. “Policies are guide to action. They include how resources are to be allocated and how tasks assigned to the organization might be accomplished … (William F. Glueck, and Lawrence R. Jauch ” Policies include guidelines, procedures, rules, programs, and budgetsestablished to support efforts to achieve stated objectives. Therefore, policies become important management tools for implementing them. ————————————————-
The final key term to be highlighted here is “strategists”. Strategistsare the individuals who are involved in the strategic management process. Several levels of management may be involved in strategic decision making. However, the people responsible for major strategic decisions are the board of director, president, the chief executive officer, the chief operating officer, and the division managers.
Benefits of strategic management
Strategic management allows and organization to be more proactive than reactive in shaping its own future; it allows an organization to initiate and influence activities and thus to exert control over its own destiny.Small business owners, chief executive officers,presidents and managers of many for-profit and non-profit organizations have recognized and realized the benefits of strategic management. Historically, the principle benefit of strategic management has been to help organizations formulate better strategies through the use of the more systematic,logical and rational approach to strategic choice.
1.Improvement in sales.
2.Improvement in profitability.
3.Improvement in productivity.
1.improved understanding of competitors strategies.
2.Enhanced awareness of threats.
3.Reduced resistance to change.
4.Enhanced problem-prevention capabilities.
15 Key Benefits of a Strategic Management System
Which of these benefits are still missing in your organization? 1. Taking an organization-wide, proactive approach to a changing global world 2. Building an executive team that serves as a model of cross-functional or horizontal teamwork 3. Having an intense executive development and strategic orientation process 4. Defining focused, quantifiable outcomes measures of success 5. Making intelligent budgeting decisions
6. Clarifying your competitive advantage
7. Reducing conflict; empowering the organization
8. Providing clear guidelines for day-to-day decisiion making
9. Creating a critical mass for change
10. “Singing from the same hymnal” throughout the organization
11. Clarifying and simplifing the barrage of management techniques
12.Empowering middle managers
13. Focusing everyone in the organization in the same overall framework 14. Speeding up implementation of the core strategies
15. Providing tangible tools for dealing with the stress of change
ETHICS IN GOOD BUSINESS STRATEGIC MANAGEMENT
Along with social progress and development, enterprise more and more aware of businessEthics in the strategic management process in importance. If the enterprise in order to damage someone else’s interests first, although the moment can be profitable, but eventually it is not a long time will eventually lead to business failure! Therefore, enterprises must be to survive, and thus long-term foothold in society, we must establish the correct concept of business Ethics and moral values this rose to the level of corporate strategic management, guiding the business strategy formulation, implementation, assess the overall strategic management process .
Business Ethics of business professionals in the business activities to be followed by ethics and code of conduct. strategic management is the enterprise in a highly competitive environment, to seek survival and development of the band to make long-term and overall plan or program. The strategic management process in general by the strategy formulation, implementation and evaluation of three stages. Of business ethics is to maintain the entire strategic management process in the link, guides the overall strategic management activities.
1, based on the strategic development of business ethics
1. Must be used to guide the establishment of the concept of business ethics, corporate vision and mission Corporate vision and mission is to business what kind of future will become the task of what the business is what? Corporate vision and mission is the basis for enterprise survival and development, there is the meaning of the enterprise, what the corporate vision and mission would have what kind of business. Corporate vision and mission must master in business ethics on and act like a corporate business ethics, or else the community was eventually abandoned.
Corporate vision and mission to establish not only concerned about their own economic interests, but also take into account the interests of corporate stakeholders. In addition to the corresponding corporate social responsibility commitments, but also other stakeholders need to be responsible at the same time meet the different stakeholders of the company’s expectations. Only in this way enterprises can be sustained and healthy development before competitive.
How to meet the expectations of different stakeholders? The extent to which meet these expectations? How to balance the interests of stakeholders conflict of interest? Resolution of these issues require a measure of the nominal, which is the nominal bar business ethics. business ethics is the various interests of the participants must follow the guidelines and the bottom line, any party can not be crossed and destruction, or face punishment. Corporate vision and mission must comply with business ethics, an enterprise doomed to the wrong direction at the starting line business is bound to fail.
2. Strategic objectives must be established on the basis of business ethics
Strategic objectives must be based on business ethics, based on the objectives of any strategymust adhere to this principle. Because of the strategic goal is to establish an enterprise based on the vision and mission, corporate vision and mission is the starting point of strategic objectives, but also the end of the strategic objectives, strategic goals ultimately want to achieve corporate vision and mission. Corporate vision and mission is founded on the basis of business ethics, therefore, strategic goals must be built on top of business ethics.
3. From a business ethics point of view to evaluate and select the best strategy for
There are many ways to achieve the strategic objectives will have a variety of programs, how to evaluate and choose from a number of programs the best option? This is the strategy formulation phase of the final work, the most important working relationship between the means of implementation.
We are from various angles to evaluate the program, but there is a premise that can not be contrary to corporate vision and mission. Corporate vision and mission is to maximize the business to pursue their own interests while meeting the business to maximize the interests of stakeholders to produce the greatest economic and social benefits. Business ethics that can be used only under nominal options choose from the various stakeholders the most satisfactory alternative strategy as the best strategy! From the short-term and on the surface, enterprises in the economic interests suffer, but long-term interests of view, a more harmonious society stability, which is more conducive to the development of enterprises, corporate earnings further. With business ethics to evaluate and select the best strategy is a win-win outcome for business and society is the best choice.
Second, implementation of the strategy based on business ethics
Strategic objectives requires a strong executive power, to guarantee. How can we ensure that the strategic objectives can be achieved?
1. Business functions in the formulation of strategies to adhere to business ethics
Firm’s strategic goal is to rely on the functional departments to carry out to achieve, functional departments goal is to break down the strategic objectives, so corporate strategic goals can be achieved is the lowest level of the functional departments of the key strategic objectives can be realized. Functional departments in the formulation of strategic goals strategies must adhere to business ethics, not because of functional target is only a small pArt of the strategic objectives, individual functional departments in order to pursue short term profits has abandoned the principles of business ethics, this approach would hurt the credibility of the enterprise and undermine business the image of an adverse impact on the enterprise, and even give a company a deadly blow, we must resolutely put an end to this phenomenon. The functional departments to develop strategies to uphold the corporate vision and mission in line with the principles of the strategic goals of the enterprise direction, according to the actual situation of enterprises to develop good strategy. Reposted elsewhere in the Research Papers Download http://eng.hi138.com
2. In the implementation process to adhere to the principles of business ethics
In order to do any business, “evergreen,” there must be a guiding core values, this is one of the core values of business ethics. In the strategy implementation process, the enterprise should these values into business strategy, organization, systems, processes, leadership style, responsibilities and rights system, etc., and then these business moral values and standards of business ethics into behavior, realize ideas and behavior unity.
Implementation of the strategy is a business strategy management process the most difficult stage. The different enterprises in the strategic implementation process will encounter a wide variety of problems with the sudden, chance, uncertainty. Therefore, the strategic concept of business ethics, the perpetrators must be under the guidance of the corporate strategy complete the whole process of dynamic contingency management. According to a myriad of specific situations flexibly and creatively use appropriate means to solve the problems faced.
3. To foster a culture of business ethics
Culture is the soul of enterprise culture is the key to implementation of the strategy, enterprises have a good strategy for the program, you need to go to all the staff work together to implement. This requires a good corporate culture to inspire staff enthusiasm, enthusiasm makes the objectives are achieved. How corporate culture a sense of unity? Enterprise’s core values must be a corporate member of the recognition and the formation of common values. Have access to corporate members of the recognized core values must have a moral premise, any moral core values are not recognized by the public.
3, based on a strategic assessment of business ethics
Strategic assessment is a systematic project throughout the entire process of strategic management. The quality strategy should have a standard to judge, this standard is business ethics. Strategic management of business ethics is the guiding ideology of the process, from the establishment of corporate vision and mission to strategy formulation and selection, implementation, and control the entire process of business ethics have played a decisive role in the guidance.
Of business ethics is a strategic assessment of the evaluation criteria, the company’s vision and mission of deciding to do a talk about business ethics, there are social morality heArt enterprises; strategic objectives must also be built on top of business ethics; in strategy development and selection process must comply with business ethics, at the same time, the greatest satisfaction to meet their own interests the interests of all parties strive to produce the greatest social and economic benefits; in the process of implementation of the strategy can not do things that any breach of business ethics in order to achieve the ultimate goal of the enterprise.
ISO14000 SERIES ENVIRONMENTAL MANAGEMENT SYSTEMS
ISO 14000, ISO14001 ISO 14004… the myriad of ISO14000 standards and information related to environmental management can sometimes hinder progress and cause confusion. This web site is designed to untangle and simpify these – to make environmental management using the above standards a much easier task. Each of these standards and items is explained, and a series of simple to use resources and guides identified. Hopefully, these pages will help you ensure that you meet your obligations diligently and professionally, but with the minumum of fuss ISO 14000 is actually a SERIES of international standards on environmental management. It provides a framework for the development of both the system and the supporting audit program. ISO 14001 was first published in 1996 and specifies the actual requirements for an environmental management system. It applies to those environmental aspects which the organization has control and over which it can be expected to have an influence.
University/College: University of California
Type of paper: Thesis/Dissertation Chapter
Date: 8 January 2017
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